Title in My Name, Insurance in Hers, Fine from State

[ever0095]

My question involves vehicle registration or title in the state of: MN

Six months ago, after consulting with a credit union on the logistics, I financed a vehicle for a close friend whose credit would not allow for the purchase of the vehicle. Loan/title in my name, insurance in hers, payment DW from my account to the CU, payments DD to my account from hers, zero issues with payments on either side.

Three weeks back, she was pulled over - the officer told her that she needed to have the title transferred to her name. She's since received a letter notifying her of a fine of ~$450 for failing to have the title in her name.

While I trust this friend, I am not an idiot, and am not comfortable transferring the title to her name as I can't see how I would have legal recourse should she fail to make payments. My questions:

1- Does state law prohibit a vehicle registration for one individual with another individual paying insurance?
2- If no to #1, how do I clear this up?
3- If yes to #1, what options do I have that would mitigate my exposure to delinquent payment?
4- If yes to #1, why did the credit union assure us that this was acceptable? They where quite clear on the legitimacy of this arrangement.


Any help would be greatly appreciated.

-Dan

[That Guy]

She's since received a letter notifying her of a fine of ~$450 for failing to have the title in her name.

Well, what statute did the cite in the letter as the basis for the violation and subsequent fine?

2- If no to #1, how do I clear this up?
3- If yes to #1, what options do I have that would mitigate my exposure to delinquent payment?

Maybe you can have the vehicle insured in your name and adding her on as a driver!

4- If yes to #1, why did the credit union assure us that this was acceptable? They where quite clear on the legitimacy of this arrangement.

I'm not sure the Credit Union has any obligation to offer you legal advice in those regards. As long as the can ensure that payments are made, and that they are listed as "Loss Payee" on the insurance policy (in case of a loss), they are probably good with any arrangement you might have with regards to insurance!